David Cameron yesterday buried the Conservative party's Thatcherite past when he promised to steer clear of a confrontational "1980s-style approach" in cutting public spending.

In remarks that may upset supporters of the former prime minister, Cameron questioned what they regard as one of her central achievements: that she rolled back the state. "We never in the 1980s actually managed to cut public spending," the Tory leader said. "The rhetoric was out there about the weight and the burden and all the rest of it, but … this is a far more serious problem than we faced in the 1980s."

Cameron, who has pledged to reduce spending at a faster rate than Labour, indicated he would adopt a more measured approach than Thatcher. "This is something we need to do with the public sector, not to the public sector," he told an FT conference in London. "This is very important: this is not some 1980s-style approach about cutting public spending."

Tory sources said Cameron, who started working in the Conservative research department in Thatcher's last two years in Downing Street, was not attacking the former prime minister.

But he distanced himself from Thatcher when asked whether her controversial approach had been "an effective medicine for the nation's fiscal ills". He replied: "I don't think it was, actually."

The intervention by Cameron shows his growing confidence as he enters the last conference season before the general election in a commanding position. The Tories believe they have won the debate over the future of the public finances after Gordon Brown admitted that he would cut public spending after the election.

With all the main parties agreeing on the need to cut spending, Cameron believes he can now afford to send a signal that he does not want to revert to the days of the "nasty party".

He made the comments as Lord Mandelson admitted Gordon Brown had embarked on a change of "optics" last week when he spoke of cuts. Declaring that Labour was "never" going to maintain its record levels of investment in public services, the business secretary said Brown had changed tack in the face of Tory "propaganda". He told the Economist: "I think the prime minister and the government have got the substance right. But sometimes you need to bring about a necessary adjustment to the optics in order to counter the propagandists you are facing on the other side of the table."

Mandelson blamed journalists for the confusion about Brown's position. "I don't blame the Conservatives. They are just propagandists. But I do critique journalists in this. They are not making the truthful distinction between what the prime minister is saying is necessary now and what he believes we should do over the medium term."